January 8, 2016 Comments Off on CBRE Techbook: Can 60 Unicorns Burst Bay Area Bubble? Views: 986 Bay Area, California News

CBRE Techbook: Can 60 Unicorns Burst Bay Area Bubble?

Concern is mounting that the booming tech industry that has fueled the Bay Area office market back to dot.com peaks is close to another zenith. A CBRE Group, Inc. report finds that while robust office-leasing activity, soaring rents, and tight vacancies in 2015 portend positive news for the Bay Area, there’s also a potential correction in tech valuations.

The concern is especially pronounced in submarkets such as San Francisco with high density of “unicorn” tenants. Venture-capital database CB Insights says there’s 60 unicorns based in or with a presence in the Bay Area, the largest concentration in the U.S.

Increased vigilance about the growth profile and lasting power of Bay Area markets isn’t surprising, since CBRE says 36% of all office stock (172 msf) is tech occupied (some 5,400 firms), and accounted for 60% of all leasing activity (through three quarters of 2015).

“Although there is caution in the air about frothy tech valuations and the continued availability of venture-capital funding, office real estate in the Bay Area remains a strong asset,” said Colin Yasukochi, CBRE’s director of research and analysis in the Bay Area.

Read More at CBRE

Connect With CBRE’s Yasukochi

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